Lobbying is a form of advocacy that specifically attempts to target or influence a piece of legislation. Nonprofits are allowed to lobby, however the IRS strictly regulates the amount and type of lobbying that nonprofits are allowed to participate in. Limiting the amount of time and money 501(c)(3)s spend on lobbying ensures that a nonprofit remains focused on the delivery of its charitable mission.

In both advocacy and lobbying efforts, 501(c)(3) public charities cannot engage in political activities, including efforts to influence elections or secure or oppose office for political candidates.

What are the different types of lobbying?

Lobbying activities are grouped into two main categories: direct lobbying and grassroots lobbying.

Direct lobbying attempts to influence legislation by communicating with a member or employee of a legislative body, or with a government official who participates in forming legislation.

Grassroots lobbying aims to influence legislation by trying to change the public’s opinion and encourage people to take action with respect to a piece of legislation.

What are the rules for nonprofits?

Since the IRS regulates lobbying to ensure that organizations are focused on the delivery of a charitable mission rather than on politics, the IRS policy is that “no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation.”

How does the IRS determine what constitutes a substantial part? They consider “all the pertinent facts and circumstances in each case,” specifically including the amount of time employees and volunteers devoted to lobbying and the total dollar expenditures devoted to lobbying in comparison to the charity’s overall budget.

As it can be difficult to determine what is “substantial,” the IRS gives nonprofits the option of opting into the Expenditure Test by filing a 501(h) election. What’s the difference between the Substantial Part Test and the Expenditure Test? The Expenditure Test outlines the exact amount of money that can be spent on lobbying efforts in relation to the amount your organization spends on the delivery of your charitable purpose.

Here is the Expenditure Test breakdown provided by the IRS:

The Takeaway

Nonprofits are allowed to lobby in attempt to influence legislation that is relevant to their charitable purpose or that impacts their service recipients. That being said, 501(c)(3)s must also ensure that lobbying is only one of many ways that their organization delivers upon their charitable mission.

Some lobbying examples explained:

A nonprofit employee is invited by a staff member from a political office to attend a committee meeting and testify or explain issues around their subject of expertise.

NOT LOBBYING - When invited to a committee meeting to share expertise in their field, the time and efforts spent are not considered lobbying on the behalf of a nonprofit organization.

A nonprofit goes to a regulator’s office in attempt to influence a regulation being written.

NOT LOBBYING - Since this effort involved a regulation rather than legislation, it is not considered a lobbying activity.

A nonprofit goes to an elected official’s office in order to support or oppose a piece of legislation.

LOBBYING - Since this effort is a direct attempt to influence a piece of legislation by meeting with an elected official, it is a clear example of lobbying.

A nonprofit urges its followers on social media to contact an elected official in order to support or oppose a piece of legislation.

LOBBYING - Even though the organization is not directly contacting a governing body, calling upon the public to do so constitutes grassroots lobbying.

A nonprofit writes an email or makes a phone call to an elected official regarding a piece of legislation.

LOBBYING - Any contact — oral, written, or electronic — with an elected official is considered a direct lobbying effort.

Employees of a nonprofit spend their lunch hours signing petitions related to a piece of legislation on their work computers.

LOBBYING - Even though the employees are signing petitions on their off time, using charitable assets (the computers) to do so makes these lobbying efforts on the part of the nonprofit organization.

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